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Opinion: Columnists

Ron Laughery: Take the deal

By Ron Laughery

Posted:
04/04/2017 07:40:40 PM MDT

Ron Laughery For the Camera

After almost a decade, an end is in sight for Boulder's electrical municipalization debate. After negotiations with City Council members, Xcel has presented two best-and-final-no-kidding-we-really-mean-it offers. Council has two weeks to choose whether to accept one of Xcel's offers or continue in court their crusade to become the electric company.

It's about time. Boulder's inability to implement any clean energy plan beyond what Xcel offered six years ago has come at an enormous environmental cost. By my estimate, Boulder's rejection of that offer has led to an additional 1.5 million tons of atmospheric carbon dioxide to produce Boulder's electricity. Talking about it is not making our air cleaner.

Council now has three options — the two mutually exclusive options presented by Xcel last week plus the third option of fighting Xcel in court to get a better deal.

Xcel's first option provides a non-litigious path for Boulder to buy Xcel's electrical supply system. This has been Boulder's plan all along, but it ain't cheap under this option. Boulder would pay an 80 percent premium on top of the Federal Energy Regulatory Commission's valuation of Xcel's business in Boulder — including equipment and customer revenue. Estimates for the price tag range from $750-900 million, which is more than three times the $214 million Boulder voters have agreed upon and far above the price needed to keep Boulder citizens from having to pay a lot more for electricity than our neighbors.

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Xcel's second option would put Boulder on the fast track to renewable sources of electricity while hastening the departure of our fossil-fueled sources. In return, Xcel would maintain its monopoly on providing electrical power to the city of Boulder. This option would take the form of a partnership with a working board made up of members representing Xcel and the city equally. Xcel has consistently demonstrated and received awards for its willingness to support green energy alternatives, so it's easy to imagine that its technical expertise in renewables, coupled with Boulder's commitment to clean energy, would yield dividends in greenhouse gas reductions, and soon.

Boulder's third option is to continue the fight with Xcel in court, hoping that this could lead to a public takeover of the electrical system at a lower cost. This means we are back to square one since the past seven years of work toward this exact same goal have yielded no tangible progress. City Attorney Tom Carr predicts this option would take "at least five more years" with an uncertain outcome.

Both the first and third options above would end up giving the city full responsibility for providing electricity to Boulder residents and businesses — always a questionable proposition. So, now is a good time to see what the past seven years have taught us about Boulder's ability to manage an enterprise as large and technically complex as an electrical utility. In a May 2011 column, I posed three questions we should ask ourselves to judge Boulder's ability to successfully pull off municipalization.

First question: How much cleaner, more locally generated electricity will Boulder be able to make than Xcel? What we've seen over the past seven years is Boulder's plans for clean energy have been, to be kind, airy fairy stuff and short on details and substance. We have seen no concrete ideas for a Boulder-driven clean energy future that Xcel could not do as well or better.

Second question: Does Boulder have the capabilities to start up and manage a utility? The past seven years of thrashing by Boulder employees with no tangible progress towards a utility speaks for itself. While their goals are noble, Boulder staff have shown us nothing to make us believe they can run the electric company all by themselves.

Third question: Does the city understand and can they address the risks? Based upon Boulder's inability to see all the stumbling blocks that have made the past seven years an ongoing exercise in futility, it's hard to believe that they now have clarity on the problems going forward with a city takeover. The fog of uncertainty has only become thicker.

If we have learned anything from the past seven years, it's that the city was in over its head from the start and has constantly struggled with the many complex technical and legal issues associated with this undertaking. We have seen little to make us believe the future would be any different.

Option two — partnering with Xcel — is the only choice that makes any sense at all. Take the deal and declare victory, Boulder. All things considered, there is nothing better we can do for both ourselves and the planet.

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